July 21 (Reuters) – Nigeria’s central bank kept its monetary policy rate unchanged at 26.50% on Tuesday, saying a cautious approach was needed given renewed fighting between the U.S. and Iran in recent weeks
The decision was in line with the forecast in a Reuters poll of economists. It was the second “hold” decision in a row.
Headline inflation was marginally lower at 15.91% year-on-year in June, but price pressures could build again after the resumption of conflict in the Middle East in early July sent global oil prices sharply higher.
“Although the headline inflation moderated marginally in June 2026, global uncertainties have heightened due mainly to the renewed hostilities in the Middle East,” Governor Olayemi Cardoso told a press conference.
“Maintaining a cautious monetary policy stance remains appropriate.”
Robert Omotunde, director and chief investment officer at MDU Capital Limited, said the policy decision would keep liquidity conditions tight and support relatively high fixed-income yields.
“This environment should continue to support investor appetite for government securities, preserve attractive real returns on fixed-income instruments as inflation moderates, and reinforce the attractiveness of naira-denominated assets to both domestic and offshore investors,” he added.
Capital Economics analyst David Omojomolo said in a research note that he thought inflation was close to its peak and this should give the central bank confidence to cut interest rates from September.
